It’s tempting for app marketers to try and adopt a ‘cost per install’ based strategy for influencer marketing.
It might appear to be the most cost effective and low risk model.
But in reality, you are going to be paying far more for your sponsored content than if you negotiate a fixed, one off payment.
Performance based deals are not the industry norm because usually everybody looses.
Influencers are savvier than we often give them credit for.
If the influencer is taking a bigger share of the risk, then they will put the price up accordingly.
With the same influencer you might have been able to negotiate a price based on a predicted cost per install and paid it with a one off payment once you approve the content.
But, if you would be paying them literally cost per install – so for every install – they will demand a much higher price because they have to insure themselves against bad performing content.
However many installs you might get off the back of that content, you were still not getting the best deal.
A key reason influencers do not like cost per install deals is the difficulty that comes with assessing how many installs were related to the content.
Even putting a tracking link in the content description, is arguably not an accurate way of counting influencer generated installs.
Some installs might appear to come organically, but were a result of people watching the content and then finding and downloading the app themselves instead of clicking on the link.
It’s why when companies test if influencer marketing is a good channel for their business, they often try to do it at a time they are not running any other advertising campaigns.
If you manage to negotiate a cost per install deal, it is likely you will have to take this into consideration (even though it is incredibly difficult to attribute how exactly these installs came about).
The ideal influencers are ones that are growing, because more and more of your target customers will catch on to the influencer and watch your sponsored content.
But if you are paying cost per install, it means you will pay more as more people discover and respond to the influencer’s call to action.
You might have 5,000 installs of your app after the first week the content is published, perhaps you will have another 5,000 after six months – so you are paying the influencer the same again.
After a year, that number will likely multiply again.
If you pay a one off fee at the beginning, all these extra installs simply bring down your original cost per install and improve your return on investment.
It will be almost impossible to collaborate with a big influencer offering a cost per install payment model.
Medium to big influencers are represented by managers or multi-channel networks, who will not accept performance based deals.
It would be very difficult to scale your influencer marketing if you immediately cut out small influencers with good growth indicators, medium and big influencers – you are not really leaving yourself much room to grow.
If you hire micro influencers and scale by hiring more month on month, this strategy is limited because you will likely run out of those that give a good return on your investment.
Offering fair, non-performance based deals, can help you foster good relationships with influencers and secure recurring or exclusivity deals with them.
It’s important not to forget that influencers have production costs, they put their time and energy into creating content your target customers get value out of and enjoy – they’re professionals who deserve fair compensation for their work.